VMA members attending the Valve Industry Leadership Forum, held Jan. 24-25 in Phoenix, heard three valve industry execs, each paired with one of their company’s future leaders, in a session called: “Leadership: Established vs. Emerging.” Sam Deep, author and leadership consultant, posed questions to the panel (representing Cameron Valves & Measurement, PBM Inc. and Rotork Controls), asking each what they are doing to develop and prepare future leaders. [We’ll be talking more about what Sam Deep and the panelists said in another article on ValveMagazine.com in the near future.]
What about your company? Do you currently have a strong chief executive? A visionary, perhaps, who has guided it to success, and who is an inspiration to both employees and stockholders? If so, you may be sitting on the edge of a precipice. What happens if that leader gets sick or dies? Will the company be able to right itself and continue, or will it lose its direction and be lost?
On Jan. 17 Apple CEO Steve Jobs announced he was taking an indefinite medical leave of absence. Over the next few days Apple stock, which had been rising steadily — up an astonishing 274% over the past two years — dropped more than 6%, despite reporting first quarter 2011 earnings of $6.43 per share, 16% above analyst estimates.
Granted, not many companies can trace so much of their success — their survival, in fact — to the leadership of one man, but that’s what Jobs did for Apple, even bringing it back from the edge of bankruptcy in 1997.
Yet the company’s stock seems to be recovering, up almost 2% as of mid-day Monday, Jan. 24. And the Jan. 22 edition of Barron’s “The Trader” column reported that Dan Chung, CEO of Fred Alger Management, had predicted that AAPL might hit $500 on annual earnings of $26 per share or more and $20 next year, driven by business purchases of the iPad and increasing international sales, and citing Apple’s careful planning for Jobs’s departure.
And that is key: a company that is heavily dependent on the leadership of one person will be severely harmed if anything happens to that person, but careful succession planning can go a long way to keep that from happening, or at least minimize it.
Now Apple may be a special case: Jobs had experienced severe medical problems twice before -- a liver transplant and pancreatic cancer -- and the company and its investors were probably better prepared than most. And Chung may be wrong. But so far things look pretty good. Can you say as much for your company?